NNPC: Diezani, Where Is Kerosene?

When the Peoples Democratic Party (PDP) and some personal aides of President Goodluck Jonathan campaigned for his election last month, availability and easy access of fuels was a major theme used to cajole Nigerian voters. It was said that the nation has conquered the evil of fuel scarcity as petroleum products are now readily available in all filling station and at the government-pegged prices.

by By Ifeanyi IzezeMay 10, 2011

When the Peoples Democratic Party (PDP) and some personal aides of President Goodluck Jonathan campaigned for his election last month, availability and easy access of fuels was a major theme used to cajole Nigerian voters. It was said that the nation has conquered the evil of fuel scarcity as petroleum products are now readily available in all filling station and at the government-pegged prices.

This was a half truth because for petrol and diesel, yes but not for kerosene. The political campaigners failed to acknowledge that kerosene which is widely used by the common man is now beyond the reach of the masses.
No matter what the managers of the Nigerian National Petroleum Corporation (NNPC) may coerce us to believe, the nation’s apex oil concern is full of glaring aberrations.

It has been severally said that Levi Ajuonuma, group general manager (Public Affairs) of NNPC, who does all the talking and defending for the corporation should for service sake move out of city centres and the high brow part of the country to get first hand information from the real Nigerians on the things he talks about so that he can wake up his conscience to stop lying to the real people (not the privileged thieves) he was supposed to be serving.

How can NNPC attribute the high price of kerosene to what the corporation called “panic-buy” by consumers? It was deceit of the first order for the corporation to claim that it flooded the market with the product and that there was enough kerosene in circulation to meet our daily needs. This was a big lie.
One would have expected the NNPC spokesperson to publicly acknowledge that the current scarcity or rather the abnormally high price of kerosene was deliberately caused by the corporation in its politics with another drain-pipe in the nation’s fuel delivery service- the Petroleum Products Pricing and Regulatory Agency (PPPRA).

It is disheartening to know that the current hardship faced by the masses of this nation who depend on kerosene for their daily survival was a result of senseless arguments and disagreement between NNPC and the PPPRA on who gets what in the sharing of the ‘egunje’ called subsidy.

The PPPRA’s story was that the Federal Government’s inability to gazette the proclamation during Obasanjo’s rule that kerosene was regulated had made it difficult for the agency to pay any subsidy on it.

On the NNPC side, the corporation claimed that that there was no way it could continue to import the product at international market prices only to be forced to sell at a regulated price which according to it is far below the cost price. So it decided to drastically draw- down on kerosene imports.

Shame to the two disabled offsprings of the same parents- another disabled in itself: the federal government.

The truth is that the scarcity is not because NNPC is selling at high prices. It is because of insufficient supply. Even if NNPC sells a truck at N100 and there is only one truck to be shared by 200 marketers, the price will continue to go high. The high price is due to the scarcity. So, no matter how cheap the marketers buy the product from the NNPC, they will continue to sell at high price because the demand is far higher than supply.

It was reliably gathered that after buying at subsidised price from the designated depots that received stocks from the NNPC, some unscrupulous marketers sell at N150 per litre and above to customers.

Some of the marketers also buy at ex-depot price of N78 and sell in trucks at ex-depot price of over N108 to other marketers that do not receive direct allocation from the NNPC/PPMC.

The marketers make profits of over one million naira from a 33,000-litre capacity tanker by buying at the NNPC-designated depots at N78 per litre and selling at ex-depot price of N109 on the same spot. Then these band of marketers in turn sell at between N140 – N200 per litre at the filling stations depending on the distance from the source and make the same amount of profit or even more. Good business: all at the expense of the common man.

It’s only the NNPC that could import sufficient kerosene to meet nationwide demand. If there is scarcity, it means NNPC is not importing enough. It would have been easier for marketers to import if kerosene business was deregulated.
So as it stands now, the current kerosene scarcity would persist or even worsen for as long as the high prices of crude oil in the international market remained.
It would be recalled that as part of his efforts to address the then incessant fuel scarcity in the country, former President Olusegun Obasanjo partially deregulated the nation’s downstream oil sector.

However, he directed that kerosene be imported and sold to Nigerians at N50 per litre when there was an outcry that the product was costlier than a litre of petrol. That policy stabilised kerosene supply problems well into the short life of Late Umaru Yar’adua-led administration.

Today, the kerosene story has returned to the same scenario (or even worse) than what made Obasanjo take the drastic action.

However, the interestingly aspect of the current situation is that, nobody in government or the NNPC seems to be seriously doing anything to address the anomaly.

If not that the NNPC is a fund raising arm of PDP, the group managing director and other key management staff ought to have been forced to resign and prosecuted like the managing directors of the troubled banks because some of the things happening in the corporation are worse than what landed the bank MDs in jail.

Former President Umaru Yar’adua openly acknowledged the existence of criminal cartels in the nation’s oil sector especially the downstream subsector. That disclosure was made about three years ago and up till now, the government has not been able to muster enough political will to fish-out the cartels and treat them like the bank chiefs. Of course the reason is obvious: the cartels are peopled mainly by active operators in the PDP and the Presidency. This is the truth, the whole truth and nothing but the truth.

IFEANYI IZEZE is an Abuja-based Consultant on Strategy and Communication ([email protected])

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